Ireland: Exaggerated & Fraudulent Claims: New Beginnings?

Introduction

On 28 July 2017 Ms. Justice Irvine in the Court of Appeal
delivered her Judgment in the case of Platt v OBH Luxury
Accommodation Limited & Anor [2017] IECA 221 (hereinafter
"Platt"). The case was an appeal of the decision
of Barton J. in the High Court from June 2015, wherein Barton J.
was satisfied that the Plaintiff had intentionally misled the court
and exaggerated his injuries and so he utilised the jurisdiction
conferred on him by s. 26 of the Civil Liability and Courts Act,
2004 ("the 2004 Act") in dismissing the
Plaintiff's case.

The Court of Appeal upheld the decision of the High Court and in
so doing has given further insight into how the courts will apply
s. 26 of the 2004 Act and what exactly constitutes an intentionally
fraudulent claim.

Section 26 Explained

Section 26 of the 2004 Act prohibits plaintiffs from knowingly
giving evidence that is false or misleading. If an application
under s. 26 is successful, the plaintiff's claim is dismissed,
even if there is liability on the part of the defendants, save for
where the court considers that a dismissal would result in an
injustice.

Background to case

The Plaintiff, Mr Jason Platt, sustained life threatening
injuries in 2009 when he fell from a windowsill in a room in the
defendant's hotel. He suffered severe injuries to his ribs,
spine and hip. Through sworn affidavits and testimony submitted by
the Plaintiff before the High Court, Mr. Platt had presented
himself as a man who was in chronic pain and severely incapacitated
by the injuries sustained from the fall. Mr. Platt had also sworn
an affidavit verifying a schedule of special damages and future
loss claiming almost Ł1.5 million.

High Court Decision

Despite finding the Defendants 60% liable, Barton J. dismissed
the Plaintiff's claim after reviewing video evidence of the
Plaintiff submitted by the Defendants. This video evidence showed
the Plaintiff regularly driving, going shopping, carrying
groceries, closing his boot and walking unaided. This evidence was
in stark contrast to the presentation of the Plaintiff to the Court
of a man profoundly disabled as a result of his injuries with the
Plaintiff giving evidence himself to the effect that he was
compelled to mobilise using either crutches, a wheelchair or a
commode.

Court of Appeal decision

Dismissing the Appeal, Irvine J said of the Plaintiff that
"his dishonesty was repeated and determined" and
was satisfied that the Plaintiff had given "evidence that
was false and misleading in a material respect". The
Court of Appeal stated that the very purpose of s. 26 was to
operate as a significant deterrent to those who would bring
fraudulent claims, due to the draconian nature of its
application.

General Principles of Section 26 Applications

The Court held the standard of proof that is required in order
to successfully invoke s. 26 was the balance of probability but
regard must be had to the seriousness of the matter being alleged,
the gravity of the issue and the consequences in considering the
evidence necessary to discharge the onus of proof.

The Court also held that mere errors by the Plaintiff were not
enough to ground a successful s. 26 application by the Defendants.
Irvine J. stated in Platt that

"it is not open to a defendant to make an application
under section 26 of the Act unless the plaintiff in the course of
the hearing is afforded an opportunity of countering the assertion
that they gave false or misleading evidence or caused such evidence
to be adduced on their behalf, knowing it to be
fraudulent."

The Court noted that if a s. 26 application is successful the
claim as a whole must fail, as stated in the case of Meehan v
BKNS Curtain Walling Systems Ltd. [2012] IEHC 441. Irvine J.
went on to state that "the plain and ordinary meaning of
the words make clear that if the evidence is false and misleading
in a material respect "the action" shall be dismissed.
The section is simply incapable of any other
construction".

The concept of "injustice" under section 26

Counsel for the Plaintiff submitted that the High Court had
erred in law by failing to conclude that an injustice would be done
to the Plaintiff should his action be dismissed (s. 26 (2)), given
the severity of the Plaintiff's injuries.

In the High Court decision of Looby v Fatalski &
anor [2014] IEHC 564 (hereinafter "Looby")
Barr J. found that the Plaintiff had "candidly admitted
that he had told the lies so that he would get more money in his
claim". However he was satisfied in that case there would
be an injustice if the action were to be dismissed, in
circumstances where the Plaintiff had always admitted to being able
to cycle, but had lied in respect of the distances and lengths of
time for which he could cycle.

The Court in Platt, however, noted that the outcome of
depriving a plaintiff of damages legitimately incurred was
anticipated by the Oireachtas in enacting the legislation. The
Court referred to the case of Higgins v Caldark [2010]
IEHC 527 where it was stated that not only was it anticipated that
a successful application would deprive the plaintiff of damages
they would otherwise be entitled to, "section 26 of the
Act contemplates such a response".

The Court must also look at the consequences for a plaintiff
where a claim is dismissed under s. 26. While adverse consequences
cannot be the only factor considered in dismissing a s. 26
application, the Court still held that it can be considered amongst
other relevant factors. A failure by a court to do so would run
contrary to the Court's obligations to construe legislation in
accordance with the constitutional principles of fairness and
proportionality.

The findings of the Court of Appeal

Having considered all submissions and evidence, the Court of
Appeal held that the finding of Barton J. in the High Court was
correct. The submission on behalf of the Plaintiff that a finding
against the Plaintiff under s. 26 would amount to an interference
with his right to bodily integrity under Art 40.3.2 of the
Constitution was also dismissed, the Court siding with the argument
put forth by John Lucey S.C. for the Defendants, that a claim such
as this was "precisely the type of case the Oireachtas had
in mind when the (Section 26) legislation was
enacted".

The Court held that in certain cases, the conduct of the
defendants may have a bearing on whether an injustice would be held
to occur in dismissing a claim for fraud. The Court held that if it
were a case that the wrongs of the defendants were considered to be
equal to that of the plaintiffs "perhaps the Court might
consider it unjust to make the order sought."

The Court held that another factor to be considered in seeking
to construe s. 26 in a proportionate and fair manner was the extent
of the falsity of the evidence and the extent the plaintiff sought
to gain from their own false evidence. A further consideration in
s. 26 cases was held to be the extent the plaintiff deceived their
own experts into giving false evidence. The Court stated that such
actions would be "material to the court's
consideration as to whether it would be unjust to dismiss his
claim".

Affidavits of Verification

The Court stated that when knowingly fraudulent information is
provided on sworn affidavit by the plaintiff to the defendant prior
to the trial, and not just when such information is presented
before a court, such behaviour may be caught by s. 26. Furthermore,
the Court of Appeal opined that if fraudulent information (in this
case the final Schedule of Special Damages in particular) is
provided or sworn as true on affidavit, the Plaintiff cannot avoid
the operation of s. 26 by subsequently withdrawing such
information. The Court was careful not to give a definitive view on
this matter, but nonetheless the consideration of what fraudulent
conduct is caught by s. 26 may be instructive for future s. 26
applications.

Conclusion

The Court's decision in Platt will be highly
instructive for solicitors considering bringing s. 26 applications
in the future. It remains difficult for defendants to successfully
invoke s. 26. However, it is hoped that the decision of the Court
of Appeal in Platt marks the start of a change in the
attitude of the judiciary towards how s. 26 applications are
considered in the future.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Overall, this was a less active year in terms of Foreign Corrupt Practices Act ("FCPA") enforcement actions, at least when compared to 2016. In 2017, the Department of Justice ("DOJ") took a total of 9 enforcement actions and the Securities and Exchange Commission ("SEC") took a total of 7 enforcement actions.

Companies and other corporate bodies operating in Ireland will risk criminal liability if they do not have adequate anti-corruption policies and procedures in place, once proposed anti-corruption legislation becomes law.

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